Transcript
0:00 hello everyone my name is Kathy Wood I am CEO and cioo of arch invest and I would like to share with you our big Ideas 2025 at least my takeaways from them our analysts have done an amazing job I think this is our best one yet so I'd highly recommend that you download it from ar- invest.com and take a look at all 140 Pages the analysts
0:30 analysts themselves will be sharing their takeaways in the next week or so so I thought I'd summarize some of the highlights first ai ai all the time AI was has been the big story for the past two years and it's still the big story in fact it is the biggest Catalyst to all of the Innovation taking place out there it is the reason that the world seems to be speeding up and
1:02 I'll just give you a few examples of how quickly things are happening so on the autonomous front we have autonomous coders in the software development space and in late 23 this autonomous coder and you'll see it in in Big Ideas was able to do three 3% of a project
1:32 that a developer gave the AI system by the end of last year that was up to roughly 75% and soon we think it will be very close to 100% so basically a developer or an engineer telling a coder this is what I want to do and the AI basically writes the code for the engineer increasing the Engineers productivity manyfold per
2:03 year another example is in the multiomic space so drug development in the area of research researchers often test hypotheses for new drug targets and and we've scored how long it takes them at the end of 23 or in the year 23 they were able to test 20 hypotheses in one year by the end of
2:36 24 20 100 hypotheses 10 times more productive so that tells us that the cost of research and Discovery as we're moving towards curing disease is collapsing so we're going to get a lot more of that kind of research and development and then a third really good example of autonomous is full self-driving now 10 years ago or maybe
3:09 11 years ago when we were writing about autonomous and when we thought it would roll out there were about 10 companies mostly auto companies who said they were going to be there within the next five to six years and we thought they were but the only one who made it at least from a commercialization point of view was wh Mo in 2018 well here we are in 2025 and weo is still Geo fenced by
3:43 territory we believe this year Tesla will deliver a fully autonomous Service they're saying in June in Austin will'll see the debut and we think that it will roll off out across the country pretty quickly thereafter so we're pretty excited about that interestingly of the 10 companies who expected to be a part of this new world only those two have made it at least in the United
4:15 States and of course in China we've got BYU Apollo so let's take you to another AI inspired movement and that's robotics G generally we believe that humanoid robots are will soon be upon us we will not be surprised to see them walking around our businesses and maybe walking around our homes after that trying to
4:48 take all the drudgery out of day-to-day work we think this is going to be a 26 trillion doll business ultimately half in the home and half in manufacturing and the developments here are once again because of artificial intelligence in fact just autonomous Robo taxis we've got a convergence of three technologies that
5:20 are driving both humanoid robots and Robo taxis forward robots themselves energy storage so Battery Technology and artificial intelligence those three Technologies converging are creating all kinds of opportunities and humanoid robots I think I I will tell you while full self-driving to took a lot longer than
5:53 we expected humanoid robots are developing faster than we expected because of the expertise that has evolved around full self-driving it's the three techn same Technologies converging so we're pretty excited about that and you know humanoid robots we we we have a a sense of how much productivity they will introduce we have a a sense because we actually have old-fashioned robots in our homes
6:25 already so washing machines before washing Machin Believe It or Not people spent a lot of time washing clothes and with the washing machine the time savings are now something like 85 or 90% we think the same will be true for many other household chores importantly food preparation and Cleanup in the home so that's going to be pretty exciting and on the manufacturing
6:58 front we've already seen robotics in action the assembly line a 100 years ago saved 85% plus of the time to manufacture one car so we're familiar it's just all of this now is speeding up thanks to the convergence of Robotics energy storage and artificial intelligence another another part of our big ideas that that I really love
7:32 is about reusable Rockets you know SpaceX is 10 years ahead of any other robotics company and they are turning around the use of the robots in just weeks now as opposed to when they first started a few years ago it took a year to turn that reusable robot around now it takes two weeks and soon we think it will take two days and we'll need
8:02 that kind of turnaround because of all the satellites that are going up and we think will deliver 132 billion dollar in Revenue potential as the world becomes so much more interconnected than it is now and then we'll jog over to another part of the big ideas that I know many people enjoy and that is
8:36 about crypto assets or digital assets and you'll see how we get to our base case for the Bitcoin price and our bull case many people know us for our bull case $1.5 million and we actually think the odds have gone up that our bull case will be the right number because of what is becoming the institutionalization of this new asset
9:06 class so many institutional investors are now looking at Bitcoin and thinking that they need to add it to their asset allocation because its return profile looks so much different and its risk profile looks so much different from all of the other Assets in their portfolio and then in another section of Big Ideas you'll see stable coins and I do think
9:38 it is quite a surprise to learn that stable coins in total the transaction value of all of them is roughly or was last year $15 trillion that was more than either Visa or Mastercard and by the end of the year the Run r rate was nearly double that $30 trillion now when we say that I want to make sure you understand that this is
10:09 transaction value there are very large transactions taking place with stable coins transaction volume or the number of transactions visa and MasterCard still have many more transactions but the value that is ramping through the digital asset ecosystem as decentralized Finance takes off or another way of saying it the internet Financial system takes off that is
10:42 scaling tremendously in a way that I don't think people really understand so we wanted to highlight the difference between that and the the stable coins in the context of visa and MasterCard one of the things I'd like to to mention before I wind up here is the amount of time that we have spent on U multi multiomics so multiomics is the study
11:13 not just of DNA or genomics but RNA proteins epigenetics It's Complicated but the reason we're spending so much time on it and the reason we have have been able to withstand the buffeting that the multiomic space has taken in in the financial markets is because of the massive opportunity that we see
11:43 Brewing we believe not only will research and development evolve much more quickly but the number of failures in new trials for drugs is going to drop precipitation ly and we truly believe that the convergence among sequencing Technologies artificial intelligence and crisper Gene editing is going to
12:13 continue curing diseases it's already curing sickle cell disease and beta phemia those revenues have already started and we can see so many other diseases cured with this convergence of three Technologies in fact crisper Therapeutics is focused on type one diabetes and type two diabetes which would be the cat category killer for
12:47 this particular cure now what is a cure worth it's so interesting that in the traditional financial markets many analysts think cures are bad business one and done they don't get the annuity associated with a chronic disease once it's cured well we would like to tell you that a cure in our view and we show it in Big Ideas should be worth anyone
13:18 anywhere from two to 20 times more than traditional medicine and we believe for that reason the returns on R&D to the Pharma and biotech sector as they Embrace these new technologies is going to move up from the low single digits it's been in a very bad place for about a decade to anywhere from 15 to
13:50 45% depending on how much companies Embrace these new technologies so that's pretty exciting and I'll wind up now by talking about what all of these convergences are going to do to economic activity and to the stock market as a whole we believe that a real GDP growth globally is going to accelerate from 3% where it
14:23 has been for the past 125 years to 7 to 8% if not more thanks to the convergence among these Technologies robotics energy storage artificial intelligence blockchain technology and multi-omic sequencing now why are we so confident about that that sounds like an outrageous number the consensus forecast is 3% well the reason is if you look back
14:56 in history you will see that that about 125 years ago three Innovation platforms were evolving at the same time telephone electricity and internal combustion engine and what did that do to real GDP growth globally it increased the rate of real GDP growth by fivefold we went from 0.6% where the world had been over the
15:28 400 100 years from 1500 to 1900 we went from 0.6% to 3% that was a five-fold increase and now we're telling you even though there are five Innovation platforms evolving with AI at the heart and soul of of the acceleration in these technology platforms that we're only going to see a two to two and a half fold increase we think that could be
15:58 very conservative and one of the reasons this is going to happen is because of productivity productivity is going to grow dramatically and productivity is associated with low inflation growth as well you can have higher wage growth if productivity is rising so it's a win-win for everyone and what a win-win means is wealth creation and what does that mean for the stock market well if we're
16:30 right then the value associated with truly disruptive innovation during the next five years in the equity markets we believe is going to rise from 12 trillion to $140 trillion more than tfold now you might wonder what is going to happen to the mag six during that period of time well the mag six will probably do fine all together although
17:02 some will be disrupted by this new world order that said we expect the magix to go from 16 trillion today to 60 trillion so that's about a four-fold increase maybe a little less than that this is another way of saying that we expect the equity Market the bull market to broaden out during the next years and benefit a lot of companies that have
17:33 been toiling away while the magic were getting all the glory and soon we think they are going to deliver the goods as well and the goods means Equity Market appreciation so we know that Innovation solves problems and we know that Innovation is key to growth that's why I founded Arc more than 10 years ago and truly disruptive innovation is here now so
18:07 remember download Big Ideas 2025 from ark-invest docomo 140 pages of research original research that has been done so masterfully by our analysts and our Chie futurist and our directors they deserve all the credit I am just here to tell the story